Both Toyota and Honda Motor Co <7267.T>, which reports monthly and annual sales later on Thursday, and are expected to end the year with much better sales gains than their U.S. competitors.

Toyota's 2012 U.S. sales rose about 27 percent, compared with gains of 3.7 percent for GM, 4.7 percent for Ford, and 21 percent for Chrysler.

Those automakers, the top four as measured in U.S. sales, showed a combined 6 percent gain in December sales.

Volkswagen AG reported a 30 percent increase for its namesake brand and luxury brand Audi in December and a 31 percent gain for the full year.

Industrywide, U.S. auto sales for 2012 are expected to show a 13 percent rise to 14.5 million new vehicles, the best performance since 2007, driven by the slowly recovering economy, more available credit and the need to replace aging cars and trucks.

Polk, a research consulting firm, said it expects U.S. auto sales to hit 15.3 million vehicles in 2013, an increase of nearly 7 percent.

Jonathan Browning, head of Volkswagen's American unit, was cautious about 2013, in part because of uncertainty regarding major economic issues including the expected congressional fight over the U.S. debt ceiling in the coming months.

"It would have been nice if all the open questions had been resolved in the 'fiscal cliff' discussion over the holiday, but clearly they weren't, and that does extend this period of uncertainty from a consumer point of view," he told reporters on a conference call on Thursday.

Chrysler said that December auto sales will show a seasonally adjusted annualized rate of about 15.5 million vehicles, not including medium and heavy trucks. Ford said it expected monthly sales near the same level.

Aided heavily by consumer incentives that reduce the price of the vehicles, GM in December dramatically reduced its inventory of full-size pickup trucks to 80 days of supply from 139 days at the end of November. Most automakers like to have about 80 days of supply of these pickup trucks.

For the overall industry, the pace of annual sales increases has been in the double digits since the market bottomed in 2009, when it hit the worst annual sales rate since World War Two, adjusting for population.

Auto sales are an early indicator of consumer demand each month. Another indicator issued on Thursday was U.S. same-store sales, excluding drug stores, which rose 4.5 percent versus analysts' expectations of 3.3 percent, according to Thomson Reuters I/B/E/S.

GM shares were up 1.8 percent at $29.66 and Ford shares were up 2.5 percent at $13.53 on Thursday morning on the New York Stock Exchange.

(Reporting by Bernie Woodall and Ben Klayman in Detroit; editing by Maureen Bavdek and Matthew Lewis)